Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.

Class III futures could not manage another day up as we saw an ultimately mixed market after prices traded both sides of unchanged during yesterday’s session.

The 2013 markets started off the session negative, got a bit of a pop to the upside after spot, but continued to grind lower as the session wore on. 2014 contracts, on the other hand, were relatively positive from the start, but took a little cue from the 2013’s and fell off after the pit session closed.

It feels as though the market is in a quandary and in need of some fundamental news to pick a direction. Don’t get me wrong here, as we have seen prices rise over the last few sessions, but we really have not been able to get a breakout move over the last highs put in around the middle of August, leaving most of the 2013 charts in a sideways pattern. Technically, we are close to being overbought on Class III and may see a bit of a pullback without some fresh fundamental news. We may languish in the current ranges for the near-term.

Spot session results:

Block cheese: $1.7825 (unchanged)

Barrel cheese: $1.7725 (up 0.25 cent)

Grade A NFDM:  $1.805 (unchanged)

Butter: $1.42 (down 1 cent)

In the grain complex, we continue to see divergence yesterday between the corn and soybean contracts as Dec. corn settled down 8.5 cents on the day at $461.00 and Nov. beans settled up 15 cents to $13.6750. Both started off the day session negative on the premise of some much needed moisture in the western growing belts. Beans, though, were not about to be kept down as questions about yields and how the crop is really maturing reared their ugly heads and sent prices higher.

We would be looking for the corn market to make a test of its last lows around the $4.4400 mark over the short term to see if that support area holds. Record yields being reported in early harvest across the U.S. will continue to pressure the market as more farmers get into the fields and verify expectations. Beans, on the other hand, could continue to be choppy until we get into the latter part of the month and closer to harvest.

This morning, we look for corn to open steady to 3 cents higher and soybeans to open steady to 5 higher.

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